Mobile Banking: From Transaction to Experience

Now that most credit unions offer basic mobile services like account transfers, ATM locators and peer-to-peer payments, the question remains: How can a credit union set itself apart from the competition?

One hint is to look to the greater retail space. It's important to remember that credit union members are also everyday consumers who have been heavily influenced by the larger retail landscape. Today's credit unions must take that into account if they're to offer competitive and compelling products.

Over the past few years, there's been a significant shift in the retail landscape and the way people prefer to purchase. Today's consumers expect more than just the ability to buy a product or, in the case of credit unions, conduct basic transactions. Instead, they expect a full-fledged experience.

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Creating an Experience

So what exactly does it mean to "offer an experience"? As its name suggests, Amazon Prime is a "prime" example of a company delivering a highly successful experience and serves as an excellent lens into how credit unions can create a compelling experience themselves. Prime Members have been shown to spend about twice as much on average than regular Amazon customers, attesting to just how successful this service is.

The success of Amazon Prime is primarily a result of how the company has pushed the boundaries of the basics to offer additional value to members. Amazon Prime isn't just a marketplace; subscribers have access to a wealth of additional benefits, including purchase reviews, shopping advice and merchant referrals to help inform their decisions, two-day shipping directly to their doors, Amazon Now for the delivery of many items in just one or two hours, exclusive discounts, video, music and eBook libraries … and that's just to name a few.

Another huge factor in the company's success is the convenient and hassle-free nature of the services it delivers. Take the example of repairing a broken sink. The experience of going to a traditional home improvement store is less than convenient, as there's the need to travel to a physical store and search through aisles for the necessary items, which may or may not be in stock. These stores often don't provide installation services, and if they do, it can often take a week or more for that installation to be completed. With Amazon Prime, on the other hand, you can easily search online to check if the part you need is in stock, receive it at your door within two business days and also receive installation services at the time of delivery – and all that without ever having to leave your home.

It's obvious that these are two glaringly different experiences. One is difficult, inconvenient and only partially solves a need, while the other is quick, convenient and goes above and beyond in offering a solution. While credit unions may deliver an experience in a different way, the basic principles are still the same: It's all about providing additional value and adding ease and convenience to members' interactions with your institution.

The Digital Assistant

One of the ways companies have been providing additional value is by utilizing artificial intelligence to facilitate tasks or transactions for their customers. For example, consumers can now order an Uber, place an order with Starbucks and buy items on Amazon all through Amazon's Alexa, among many other tasks.

Voice first devices like Amazon's Alexa are becoming increasingly popular among consumers. In fact, this is the era of the digital assistant. It's predicted there will have been 33 million voice-first devices purchased in the U.S. by the end of this year, with 24.5 million of those shipped in 2017 alone.

These devices have seen so much traction with consumers because they make tasks easy. Instead of having to learn a new app or navigate a menu, users can simply request what they want. The experience aligns with what humans do naturally: Speak.

Credit unions can take a similar approach and use artificial intelligence to provide self-service financial transactions and advice to their members to both make basic banking tasks easier and improve fiscal health. Bank of America has taken this approach with its recently-released robo-advisor, Erica, that works inside of its existing mobile app. Not only can the bot complete traditional mobile banking tasks, like making transfers between accounts, but it also builds in added value by providing tailored financial advice. Erica is even advanced enough to complete higher level tasks, like comparing different payment plans for loans and using predictive analytics to note shifts in user behavior.

Text Interfacing

Similarly, credit unions can incorporate mobile banking capabilities into members' native texting applications such as the iPhone's iMessage. Touch is another way that people naturally use their phones, so text is a convenient and intuitive way for members to access the value delivered by their credit union.

Venmo is an excellent example of a non-financial institution that has done this successfully. Its capabilities are now interfaced with the iMessage app so users can send and request payments while texting friends. The experience aligns with how people use their phones daily, so there's no disruption or need to navigate the Venmo app.

Credit unions can take similar approaches with existing peer-to-peer payments capabilities within their own mobile apps to make transactions more user-friendly for their members. This enables them not only to better compete with other financial institutions but non-financial services companies as well.

Building in Value

As mentioned previously, Amazon Prime has managed to be successful because so much additional value beyond access to a marketplace is packed into a membership. To make their own mobile offerings more successful, credit unions should follow suit by identifying ways they can provide more than just basic banking tasks and build more value into their services.

One idea is to offer discounts or deals, which consumers have identified as a major incentive for continuing to bank with their current institution, according to Accenture. Not only have many consumers self-identified deals as a valuable benefit because they get more bang for their buck on the products and services they need, but offering discounts also serves as a way for credit unions to encourage better spending habits and overall financial health.

Credit unions can utilize push notifications to frequently remind members of the value their institutions are providing and amplify their impact even further. For example, American Express recently built a coupon portal into its mobile banking app that integrates with Facebook Messenger and messages users when they're in the proximity of a deal that may be relevant.

Creating an experience doesn't just set today's credit unions apart; in fact, it's a requirement if they expect to keep up with the competition, both within the financial services industry and beyond. Doing so hinges on two basic principles: Providing value and cultivating convenience. Follow these principles, and not only will your credit union see better business, but you'll also see happier, more loyal and more engaged members.